ASCAP Asks FCC To Block Pandora From Buying Radio Station, Because ASCAP Doesn't Like Pandora

from the because-reasons dept

We'd already talked about how the legacy players in the recording industry had lashed out at Pandora for buying a small radio station. As we noted, Pandora was doing this to more or less highlight the absolute hypocrisy (and possible illegality) of ASCAP who offers cheaper streaming rates for terrestrial radio stations to stream their programming online. Since this stuff gets a bit confusing, as a reminder, ASCAP (along with others like BMI and SESAC) collect and distribute money for composers and publishers, not for musicians playing the music (though, obviously, sometimes the composers also play). ASCAP has a variety of different rates that it charges for things, and Pandora noted that its online competitors, such as iHeartRadio -- which is owned by ClearChannel, the largest owners of terrestrial radio stations in the US -- pay a lower rate for online streaming.

ASCAP has been offering iHeartRadio and other terrestrial stations that also do streaming cheaper licenses for their streaming than it offers to Pandora. Pandora has argued that this violates the antitrust agreement that the DOJ made ASCAP agree to, after it was discovered that ASCAP was engaged in a variety of anti-competitive practices to restrict the market.

The hysteria over this from some less-than-well-informed folks in the music industry has really been quite incredible. Contrary to some claims that we've seen, Pandora is not trying to get a special deal. Nor is it trying to say that it doesn't have to pay performer rights (which are a whole different issue). All it's really doing is highlighting how ASCAP is discriminating against online-only streaming services by charging them different rates than online streaming services that happened to be owned by terrestrial radio stations.

Pandora is buying KXMZ for one reason – to argue that it is entitled to pay lower music
performance royalties to composers, songwriters and lyricists for its billions of online-only
internet music streams.

Actually, it seems like Pandora is buying KXMZ to demonstrate that ASCAP has discriminatory and unfair pricing practices in how it offers its licenses. It's not that Pandora is claiming that it alone is magically entitled to lower royalties -- it's pointing out that everyone else gets lower royalties and Pandora is wondering why it is singled out for higher royalties.

Honestly, that's about the extent of ASCAP's argument. Beyond that, it focuses on some procedural issues about the paperwork that Pandora filled out -- ASCAP claims they didn't follow all the rules. But, clearly, ASCAP doesn't go around making sure that everyone buying radio stations has dotted their i's and crossed their t's. ASCAP is just upset that Pandora is suddenly calling attention to ASCAP's discriminatory online streaming rates. Even on the technicalities ASCAP is being particularly ridiculous. For example, it claims that Pandora did not properly disclose its ownership, because it claims that Pandora improperly referred to Wellington Management Company as "an investment adviser" in the past, but for this document, refers to it as "an investment company." That's the sort of minutiae ASCAP is pulling out to try to block this.

The whole thing is petty in the extreme. ASCAP clearly has discriminatory pricing practices against online-only streaming companies -- and is embarrassed by Pandora making this point very clearly by purchasing this tiny radio station. Is it a move to "game" the system? Yes, it is but a move necessitated by ASCAP's discriminatory pricing. If ASCAP is so upset about this, perhaps it shouldn't have priced internet streaming differently depending on whether or not you own a radio station.

Reader Comments

Easy enough to explain:

With offline radios that just happen to stream their music online as well, the influence, both monetary or otherwise the labels hold means the big labels are able to decide what and who is and is not played, so both the offline and the online services benefit the labels.

A purely online service like Pandora on the other hand, allows the listeners to choose what they want to hear, and allows those not shackled to the labels to get equal air-time. Is it any wonder then they want to get rid of Pandora, given that?

Re: Easy enough to explain:

Not only that, Pandora features a wealth of independent music as well and allows their userbase to determine what they want to hear, i.e. not just major label artists. The latter don't get to dominate the service like they do most every other. This most certainly is the root cause for all the antagonism towards Pandora.

Re: Re: Easy enough to explain:

Yup, as another poster commented a while back, Pandora puts indie musicians on equal footing with label musicians, and the labels absolutely cannot stand having equal competition like that, hence their desire to crush or control Pandora.

Re: Easy enough to explain:

Basically they are desperately defending a dark-grey area practice by using procedural tricks. Wouldn't you? Nevermind that they are spewing gibberish and ideally should represent all composers and publishers. They are defending jobs and old wealth against innovation and redistribution. Is that so wrong?

Re:

I noticed that too. It reads like half of a sentence. Cutting out the extra info to break the sentence down we get this:

ASCAP has a variety of different rates that it charges for things, and Pandora noted that its online competitors, such as iHeartRadio -- which is owned by ClearChannel, the largest owners of terrestrial radio stations in the US.

Pandora noted that its online competitors, such as iHeartRadio...what?

Re: ASCAP Asks FCC To Block Pandora From Buying Radio Station, Because ASCAP Doesn't Like Pandora

Bad commenters have their comments blocked from Techdirt because other commenters donít like commenters who add no value to the article or the discussion of said article.

As Iíve said before: Techdirt admins have no obligation to allow your comments to appear on Techdirt, and you have no legal recourse with which to force it to happen. The report system/comment blocking does not count as censorship or an infringement upon your Constitutionally-guaranteed right to self-expression.

Oh, and dissenting ideas show up here all the time; on the other hand, Techdirt commenters and admins have little patience for ad hominem attacks and comments mean only to troll the comments and lower the level of discourse.

So, do you have an actual comment about the story above, or did you come here to whine about a self-fulfilling prophecy?

Re: ASCAP Asks FCC To Block Pandora From Buying Radio Station, Because ASCAP Doesn't Like Pandora

Broadcasting and cableco monopolists ask the government to wrongfully grant them monopolies because they don't like dissenting and competing media. At least you are allowed to come here and comment. Abolish government established broadcasting and cableco monopolists for private and commercial use.

Furthermore, you are allowed to start your own blog and if people like your blog they will follow. So why don't you do it? Why do you come here? Oh, because no one would listen to your nonsense. The media cartels insist on having the government grant them monopolies because they know that what they deliver is pure propaganda and no one would listen to it in the face of competition.

In fact, government established broadcasting and cableco monopolies are an abrogation of free speech. The government is restricting my free speech and its distribution based on the discretion of a self interested private monopoly holder. This is the worst possible free speech abrogation the government can impose because such restrictions are directly directed to serve the interests of a private party at the discretion of said private party. This is arguably what the founding fathers sought to prevent. Look at Russia where the govt-industrial complex work hand in hand and the govt protects industry. Historically governments have been well known to grant monopoly power and restrict free speech based on the interests of private merchants and various monopolists and that's why the founding fathers were very skeptical of patents and sought to limit their user.

A private party is allowed to determine what speech is distributed and what speech isn't and it uses the government to enforce its decisions. That's arguably worse than having the government restrict free speech for its interests.

Thanks to these media cartels copy'right' law now lasts 95+ years and has been retroactively extended to the point that nothing ever enters the public domain anymore. The government grants taxi-cab monopolies causing taxicab prices to be way overinflated. The media has either kept us ignorant or have fed us propaganda and lies to allow for such bad laws to have been passed. The mainstream media cartels have truly been a disservice to us all and their government established monopoly power must be relinquished.

and the media cartels should be ashamed of themselves for abusing their monopoly power in their self interests at the expense of the public. But of course they aren't, these heartless criminals have no moral standards whatsoever.

Re: ASCAP Asks FCC To Block Pandora From Buying Radio Station, Because ASCAP Doesn't Like Pandora

and are you seriously siding with ASCAP, the MPAA, and the RIAA? What kinda monster would side with these heartless thugs. These people have destroyed our laws, they have destroyed our culture, they have scammed and extorted both the public and artists and manipulated the laws to give them monopoly power so that they can continue their extortion racket all for their personal gain. These criminals should be in jail and all the bought politicians that have passed laws in their favor should be in jail with them. Corrupt politicians that pass selfish laws (ie: 95+ year copy protection lengths) are arguably the worst criminals because their laws affect millions and they should receive the worst punishments.

Hm, maybe some sort of cross between a vampire and a fish-man. A lamprey-man, maybe, or perhaps just a fish-man that was made into a vampire, like if it was the Dracula from the Black Lagoon or something.

Who would side with them? Songwriters. ASCAP collects money for them, albeit the radio play portion is often a pittance compared to the cut physical media gets (10-15% off the top). They more care about bullying venues to pay their performance tax. In my experience, radio doesn't pay musicians at all (it is considered free advertising for your band), so Pandora paying artists is a good thing, even if it isn't much.

This is again Mike merely favoring NEW gatekeepers.

First a howler: "technicality's" when you mean the plural "technicalities". Sheesh. Even Ivy League must be party schools now.

Anyhoo, it's been established that Pandora is nothing but new gatekeepers getting filthy rich while paying artists even less of pittance than the old gang. Of course grifters want to get lower rates. This is just a cynical stunt to pretend that Pandora can't pay the rates demanded. -- And as for the rates difference, well, I'd bet ASCAP charges differently (more) for television use than radio, based on obvious audience numbers.

This is typical Masnicking: wild exaggermeration (look at all his pejoratives and adjectives!) of a monetary dispute, of course with Mike favoring his Internet Grifter pals over actual artists.

Take a loopy tour of Techdirt.com! You always end up same place!http://techdirt.com/
Where fanboys assert that multi-billion industries are doing it all wrong!

Re: This is again Mike merely favoring NEW gatekeepers.

Pandora is nothing but new gatekeepers getting filthy rich while paying artists even less of pittance than the old gang

Pandora pays artists lower royalty rates because the RIAA and its music industry brethren rigged the system against Pandora, Spotify, and other Internet radio providers/broadcasters.

Then again, at least Pandora pays artists.

Of course grifters want to get lower rates.

I wouldn't refer to Pandora as Ďgriftersí if Pandora actually pays artists the royalties they deserve (and by all accounts, Pandora does).

Pandora wants a level playing field where Internet radio providers pay the same rates as terrestrial radio providers. What about that makes Pandora Ďevilí?

This is just a cynical stunt to pretend that Pandora can't pay the rates demanded.

What makes it a stunt? What information do you have on Pandoraís financial situation that we apparently donít? How do you expect us to believe a claim such as yours without proof?

And as for the rates difference, well, I'd bet ASCAP charges differently (more) for television use than radio, based on obvious audience numbers.

Television networks can afford the higher rates given the larger number of viewers and the higher amount of income, and they also generally own the rights to (at least) first-run content aired on said networks.

Internet radio providers donít have ways of monetizing the licensed content it airs (whereas TV networks can sell DVDs and other licensed physical merchandise).

It makes no sense to charge Internet radio providers a higher licensing rate than terrestrial radio providers (which also canít monetize the licensed content they air).

Re: This is again Mike merely favoring NEW gatekeepers.

Re: This is again Mike merely favoring NEW gatekeepers.

"First a howler: "technicality's" when you mean the plural "technicalities"."

If that's all it takes to make you howl, you must have a very low excitement threshold. Your life must be a riot. And I wouldn't be criticising anyone else's spelling and grammar; yours is often shocking.

"Anyhoo, it's been established that Pandora is nothing but new gatekeepers getting filthy rich while paying artists even less of pittance than the old gang."

No, this has been claimed by you. It's been established by nobody.

"Of course grifters want to get lower rates."

I don't think anyone wanting the same rates as comparable services can be called a grifter (a word you truly donít know the meaning of).

"This is just a cynical stunt to pretend that Pandora can't pay the rates demanded."

Well at their current rates they're running at a loss. So yes, they obviously can't pay the rates demanded forever. Not rocket science.

"And as for the rates difference, well, I'd bet ASCAP charges differently (more) for television use than radio, based on obvious audience numbers."

Re: Re: Re: Re: This is again Mike merely favoring NEW gatekeepers.

Re: This is again Mike merely favoring NEW gatekeepers.

What I find amusing is that ootb is saying rich people are evil in another article. Pandora hasn't made much money since it has started. The old gatekeepers are doing everything in their power not to pay artist so they can keep it all. He is then supporting the rich people/gatekeepers on this article but against it in another. And not only that but some of the worst kind of rich people. Hypocrisy +10.

Re:

SUPER DOJ

This sounds like a job for SUPER AGENCY...DOJ. Faster than a speeding slug. Stronger than the US Consitution. Able to leap tall conundrums, with the ability to audit Hollywood and Collection Agencies in thier sleep. Owning a sense of fairness that confabulates organized crime, mere citizens, the State Departments of 209 of the 212 countries in the world, and the Taliban. They fly to indict the inocent. They strive to achieve a complete dexterity of banality. They speed to overcome any sense of fairness, comportment or credulity. There they go SUPER DOJ!

Greedy! Greedy! And I never received a dime. Lot's of artists I know get their songs played on terrestrial radio and never receive a penny from ASCAP or BMI. They are ripoffs as far a I am concerned. They steal from the artists. Let's start an online service that streams music from only artists who have no ASCAP affiliations.

Re:

Why do you think the major labels permeate the airwaves with their big-names? To ensure that they receive the lion's share of royalties. It goes without saying that if they're in a position to determine who succeeds and who doesn't in the marketplace, they're going to ensure their own success without exception.

Re:

Shon - you may not know that when you hear a song there are actually two copyrights involved. One is owned by the songwriter who wrote the song and the other by the label/artist which made the sound recording. Both copyrights are treated differently under the law. Songwriters get paid when their songs are played over AM/FM radio, artists are not. Webcasters are required to pay both songwriters and artists. ASCAP collects royalties on behalf of songwriters and publishers, not artists. So your proposal doesn't actually solve anything. A change to the law is required for artists to receive compensation.

coment

Another shoddy Masnick piece that doesn't tell the whole story. ASCAP is governed by a department of justice consent decree which dictates that they license anyone who asks for one. If they can't agree on a rate, a federal court decides what the rate will be. In other words ASCAP actually has very little leverage when it comes to negotiating rates. Broadcasters who also offer streams receive a break on their streams because almost all of their royalties are paid for their use of music over the air. Their streams are incidental to their overall business. Pandora, which is currently a 100% streaming service is trying to say that if they own a single radio station that serves a few hundred individuals in bum fuck that they should receive the same preferred rate. The real story is Pandora going to court, to Congress, and now buying a radio station to try to screw songwriters (the guys who don't tour or sell T-shirts) out of royalties instead of trying to figure out a way to raise their revenue through ads or subscriptions. Funny what incumbents like Pandora will do to preserve their business model. Admittedly, Pandora does have a point that their competitors are screwing songwriters even worse and that's not fair. But the answer is to level the playing field by doing away with below-market, government imposed rates for broadcasters, not allowing Pandora to thrust their dick further up the ass of the songwriting community's collective bunghole.